O'Reilly signed a two-year, $10 million offer sheet tendered by the Flames on Thursday, and the Avalanche announced during the first period of Thursday night's game against Calgary that they had matched the offer.
O'Reilly will receive a prorated $1 million salary this season, along with a $2.5 million signing bonus, and $6.5 million next season. The Avalanche had seven days to match the offer or receive first- and third-round picks in the NHL Draft as compensation.
"This was a goal of ours from the outset, to get Ryan signed, and that goal was completed today," Avalanche general manager Greg Sherman said. "With the support, I can tell you, of our ownership – not only today but throughout this process – we have come to terms with Ryan O'Reilly and now we move forward as a hockey club.
"Given the time frame that we moved on this, I think it's pretty clear what our objective was. We moved very quickly and efficiently to go ahead and make the decision to match the offer. We're happy to have him under contract."
O'Reilly is eager to get back on the ice.
"Very excited to join back up with the boys," he said via his Twitter account. "Can't wait to get on the ice and play in front of the great Avalanche fans again. Sorry to everyone about the situation. I'm very glad to say that it is over and I now can focus on what I love to do."
O'Reilly, 22, led the Avalanche in scoring last season with 55 points in 81 games, when he set career highs for goals (18) and assists (37). He set a team record with an NHL-best 101 takeaways.
"He's going to help our team," captain Gabriel Landeskog said after Thursday's 5-4 win against Calgary. "I think that's what we're all looking for. It's pretty exciting news."
The Avalanche had offered O'Reilly a two-year, $7 million contract and a five-year, $17 million deal during offseason negotiations that seemed to have reached an impasse before the Flames entered the picture.
"[The goal to sign O'Reilly] never changed," Sherman said. "Sometimes that process takes a little longer than you would expect or would want, but ultimately today he's staying with the Colorado Avalanche. It was our goal from Day One. To get Ryan back in an Avalanche uniform and get him back on the ice as soon as possible, we're certainly pleased to have that be the case.
"We made efforts throughout the summer to get Ryan under contract. I see Ryan as part of our core, no question."
Center Paul Stastny feels the quick decision to match is a good sign.
"It's a big step," he said. "It kind of shows that we're not going to let our top players go for – not for free, but just for a draft pick. We're going to keep building. They weren't hesitant about it. They didn't wait seven days. The fact that they did it right away shows they're committed.”
Sherman said the Avalanche is in the process of making arrangements to get O'Reilly, who lives in Ontario, to Denver in order to take his physical and accompany the team on a three-game trip that begins Sunday in Columbus.
Sherman spoke with O'Reilly after matching the offer and said the player "sounded excited, ready to go."
Sherman said it is a "little bit of an unknown" what kind of playing condition O'Reilly is in. He added: "Knowing Ryan's history and how he takes care of himself, I'm not overly concerned."
Coach Joe Sacco is eager to get O'Reilly back in the lineup.
"As coaches we're obviously very excited about having Ryan back in our lineup," he said. "He's a good player and he's going to help our team, there's no question about it. I think as an organization they're happy as well. All along they wanted to try and get a deal done with him. We're excited to have him back here. I'm not exactly sure when he'll be here. Hopefully he'll be here in the next few days.”
The Avalanche selected O'Reilly with their second-round pick (No. 33) in the 2009 NHL Draft. A solid two-way player who also kills penalties, O'Reilly has 39 goals, 68 assists and 236 NHL games in three seasons.
Sherman was diplomatic when asked about the Flames' decision to tender O'Reilly the offer sheet.
"It's their right within the CBA," he said. "If that's the way they want to do their business, that's their right. Calgary made a decision to use the right that they have to put forth an offer sheet. We also have our right within the CBA to match that. Ultimately that's the business we're in.
"The fact that we received the offer today on the day of a game and against them, again that's their prerogative, that's their business."
This marked the second time the Avalanche matched an offer sheet tendered by another team. They retained star center Joe Sakic in 1997 by matching a three-year, $21 million offer sheet that included a $15 million signing bonus tendered by the New York Rangers in 1997.